Health Care Law Upheld – 2013 Tax Provisions


With the Supreme Court (6/28/12) upholding the Affordable Care Act, you should continue preparing for the following provisions that become effective in 2013: (1) employer-provided health Flexible Spending Arrangements (FSAs) will be limited to $2,500 per year, (2) the hospital insurance portion of the FICA tax will be increased from 1.45% to 2.35% for wages over $200,000 ($250,000 if MFJ (married filing joint); $125,000 if MFS), (3) medical expenses will be deductible as itemized deductions only to the extent they exceed 10% of AGI (7.5% threshold will still apply to taxpayers who turn 65 before the end of the tax year), (4) taxpayers with modified AGI over $200,000 ($250,000 if MFJ; $125,000 if MFS) will be subject to a 3.8% surtax on net investment income, and (5) employers who provide qualified prescription drug coverage for Medicare Part D eligible retirees, which is subsidized by the Department of Health and Human Services, will have to reduce their deduction for the coverage by the amount of the excludable subsidy.

Have questions? I’m here to help.